eNET Internetkutató és Tanácsadó Kft.

The online bonus/coupon market soars further

2013. March 11.

The Hungarian online bonus/coupon market realised a 6.5 billion HUF return in 2012. While the number of participants is decreasing and the signs of market consolidation are observable, the popularity of the greatest pages is unbroken – according to the yearly research summary of eNET.

In 2012, several media reports, articles and forums dealt with the situation of the online bonus/coupon sales. The interest is not groundless, as ever since its appearance in Hungary in the autumn of 2010, the model keeps internet users, and what is more, even great masses of people previously not involved in online shopping in a fever of excitement. A great number of new services and products – previously not available or not easily found in the Internet – became available in a favourable, and for many people at an unmissable price. Thanks to the above, the popularity of the greatest pages raised to the sky instantly, which was only topped off by the fact that there was a long and tight competition for the market leader status in terms of different sales figures.

At the time when bonus/coupon sites were lounched at the end of 2010, eNET set the goal of measuring the performance of these pages, and as a result, it would present its findings reflecting the developments in the competition. The present summary evaluates last year’s performance of the sector:

 

The market totalling 4,5 billion HUF in the first full year after its start – in 2011 – valued 6,5 billion HUF in 2012, which is almost a 45% increase compared to 2011. Furthermore, the value includes only the sales of the bonus/coupon sites with general supply.

Consolidation

At the end of last year, the number of bonus/coupon market participants with general supply was 19, however, this number was over 30 at the beginning of 2012. Since in terms of most of the data measured (number of offers, number of bonuses/coupons sold, revenues etc.), it is clearly visible that the performance of the top three sites is outstanding compared to the rest – with a 70% market share in total – the consolidation is expected to continue in the future.

This does not mean that the companies with lower revenues are less skilled than the top three, but those were the first market entrants that succeeded in becoming known brands, which in turn is crucial in attracting merchant partners and masses of consumers. Therefore, in the middle tier of the market there is only little chance for outstanding growth, except for some offers with spectacular success.

Besides consolidation, last year brought specialisation as well, especially the popularity of the sites focusing on travel offers showed an outstanding growth (e.g. NemaradjLe.hu, Szállásguru.hu). In our analysis in 2011, these sites were still valued as parts of the bonus/coupon market, however, currently it is more accurate to value this special field as part of the online travel broker market, which shows a dinamic growth as well.

Bónusz Brigád is still in the lead

The top sellers had monthly sales values of several hundred million forints each. In 2012., Bónusz Brigád achieved the highest turnover selling bonuses in a value of more than 2.2 billion forints, the second was Kupon Világ with its coupons sold in a value of almost 1.9 billion forints, and Napi Tipp qualified again in 2012 as the third with its 426 million forints yearly revenue.

 

One million bonuses / coupons sold

In 2012, the companies monitored by eNET presented a mean 12 thousand offers in total, and sold more than one million bonuses/coupons in the total value of 6.5 billion forints with an average 55% discount. This means that if we claculate with the original price of the services and products offered, the real value would be 14.4 billion HUF, leaving 7.9 billion HUF in the pockets of the customers as savings.

Customers spend 12 600 Forints on an average bonus/coupon, which is more than twice as much as the value measured at the end of 2011, implying that besides the high number of more expensive offers, customers are more and more conscious and buy bonuses/coupons at a higher price more fearlessly. They do so despite the fact that the average discount on an offer did not show any reasonable growth and stagnates at about 50-55%. The stagnation of discount rates is due to the popularity of the products as well, for which brokers offer discount rates at 30-40 % compared to the usual 50-90% discount rate in the case of services.

Of the approximately 12 thousand offers comprised in the total market, 6500 were tied to the three major players. Bónusz Brigád, with its 4200 offers made up 65% of the whole supply, so the market leader alone had more offers in 2012 than the second and the third runners-up combined. On the whole, in 2012, 35% of the total offers were given by Bónusz Brigád, 12% by Kupon Világ and 8% by Napi Tipp.

 

The top three companies are also dominating the market in terms of sales volume, thanks to their 775 thousand bonuses/coupons sold, representing 72% of the market total. Bónusz Brigád sold 55 thousand more bonuses on its own than Kupon világ and Napi Tipp together, thus the market leader provided 54% of the bonuses/coupons sold.

Except for the travel offers, the vast majority of the discounts were available in Budapest. Services available in other cities brought not more than 2.3% of the total revenue. Thus, the market is still unable to broaden beyond Budapest, which is implied by the fact that local sellers concentrating on certain cities or regions disappeared one after the other from the range of offers. In the course of 2012, virtually all the sellers became local, so presently there is a single statewide public shopping site in Hungary, Bónusz Brigád, which has a widespread and regular activity in the country. Last year they had a total of 930 local offers in seven big cities: Debrecen, Győr, Kecskemét, Miskolc, Pécs, Szeged, Székesfehérvár, selling 43 thousand bonuses in the value of 140 million forints.

Still primarily services

In 2012, product sales played a bigger role than in the previous year, however, the focus is still on services regarding the total market. Of the 12 thousand offers, 21% was concerned products, of which 310 thousand bonuses/coupons found their buyers. This is 28% of the total number sold, while it means not more than 13% of the total revenue. Thus, although product offers are popular, they are typically of lower value. While the average price of a service offer was 14 thousand forints, this value was hardly half of it in the case of products.

 

However, the popularity of different offer categories did not show significant change even last year. Travel offers are still on top in terms of revenues, closely followed by the beauty care and health offers, which are popular as well. The latter two categories dominate one third of the service offers, and this is so with the TOP3 sellers. The basis of the revenues at each of the three companies were travel offers, followed by beauty care offers at the second place.

Community building is crucial

Active presence on the largest social site is part of the business model, which is not only an excellent channel of communication and advertisement, but also a forum where customers can share their comments and experiences with other members of the community, boosting brand loyality that is crucial to these online sites.

The three largest market players showed a marked improvement in this field as well during the course of the year. The number of their followers grew by 90 thousand people in total, and presumably, the great majority of these new followers have already made a purchase or will eventually shop on one of the bonus/coupon websites.

Which way further?

Thanks to the consolidation, the number of companies dropped under 20 in 2012, and another two players left the market this year. However, the reasons for the drop are not due to the inadequate or unsustainable business model, but much rather they should be deemed as part of an educational process. Merchants and suppliers who use bonus/coupon sales are more and more conscious in utilising this tool, have learnt its place among their different advertising activities and sales channels, and they aim to ensure their presence on the website of any of the most popular brokers – brands – to achieve success. This tendence gradually suppresses small and local players.

Consumers keep on shopping, trust in brokers, which is well indicated by the more and more „brave”, increasing pricing. The greatest player surmounting the market is outstanding today not only in the sector but also concerning the total e-commerce in terms of volume and market position.

eNET

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RESEARCH THEMES
Bonus/Coupon, e-commerce, e-government, e-finance, e-tourism, Electronic Communications, Frequency, Information Society, Information Security, Internet Subscriptions, Internet Economy, Internet usage, Internet Access, Internet Penetration, Internetbank, Internet Commerce, R&D, Christmas, Social Site, Media, Mobile Payment, Mobile Purse, Mobile Shopping, Mobile Internet, Mobile Games, Mobile Phones, NGN, Smartphone , Online Games, Online Shopping, PC, Tablet, Telecommunication Spending, TV, Video Sharing, VoD